TOKYO Japan on Thursday asked the World Trade Organization (WTO) to set up a dispute settlement panel to examine India's safeguard duties on steel imports which it says may be violating the WTO rules.Japan, the world's second-biggest steel producer, usually tries to deal with trade disputes through bilateral talks, but with global trade friction increasing, Japan's defence of an industry that sells nearly half of its products overseas is getting more vigorous.Japan in December asked for WTO dispute consultations with India over steel safeguard duties and a minimum import price for iron and steel products.

India imposed duties of up to 20 percent on some hot-rolled flat steel products in September 2015, and set a floor price in February 2016 for steel product imports to deter countries such as China, Japan and South Korea from undercutting local mills.

India ended the minimum import price last month, but it kept safeguard duties even after the two sides held talks in early February.Tokyo claims India's safeguard duties are inconsistent with WTO rules and contributed to the plunge in its hot-rolled coil exports to India, which dropped to 8th-largest on Japan's buyer list in 2016, down from 3rd-largest in 2015.

"Indian government determined that local industry has been damaged even though their output and sales have not deteriorated," Osamu Nishiwaki, director of trade policy bureau at the Ministry of Economy, Trade and Industry (METI) told a news conference. "We are taking these actions also to avoid other countries from easily imposing these emergency measures," said Takanari Yamashita, director of the METI's metal industries division. (Reporting by Yuka Obayashi. Editing by Jane Merriman)

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